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Innovative Leadership through Connected Commerce: Lessons from eBay

John Donahoe, CEO of eBay, delivered the Hallene Lecture at the University of Illinois campus at Champaign last week. Mr. Donahoe, a native of Illinois, was previously managing director at Bain and Company before moving to eBay in 2005. In February, Fortune magazine named eBay in its list of most admired companies in the world.

Mr. Donahoe talked about his vision of securing eBay’s place as an enduring great company. To accomplish this vision, he said that they needed to have a higher purpose: eBay must facilitate in changing the lives of people around the world. Because eBay had overcome several adversities over the past few years, he felt that these experiences had built their company’s character, one that should stand them in good stead in the future.

The bulk of Mr. Donahoe’s lecture was focused on the future of commerce. Owing to technology changes, he anticipated that the world will see more change in how consumers shop and pay in the next three years than you’ve seen in 20 years. More importantly, akin to the Apple iPad that changed the news industry forever, smart phones are likely to be the technology enablers that will change the retail industry. Consumers are likely to access smart phones for information while shopping in brick-and-mortar retailers and hence the differences between shopping in physical stores and online shopping are likely to be blurred. As a result of this explosion of information and ready access, retailer power is likely to shift towards consumers. Hence companies have to be extraordinarily customer-centric and satisfy consumer needs when, where, and how they want their products.

Mr. Donahoe focused on the changing role of technology as well. While technology so far has focused on scale and automation, the predominant emphasis has been on efficiency gains. His viewpoint was that newer technologies will push the boundaries of commerce thereby fueling more “connected” commerce. In this era of connected commerce, cooperation among all relevant parties including consumers, firms, and communities would become the norm. Competition would then be more about “it takes all kinds of players to win” and less about a “winner take all” philosophy. More importantly, he felt that digital technologies will enable capable firms of scaling new heights with respect to customization and personalization of offerings. Companies that utilize technologies to develop deep personal relationships with customers are likely to emerge successful.

All in all, it was a thought provoking presentation by a proven innovative leader.